Maturity by maturity bidding refers to a specific type of bond auction process. In this method, underwriters can submit bids for individual maturities of bonds within a larger issue, rather than bidding for the entire bond issue at once. This allows for more targeted bidding and can lead to more favorable outcomes for both the issuers and the bidders.
This term is primarily used in the context of public finance and securities law. It is relevant for underwriters, financial institutions, and government entities involved in issuing bonds. The process is governed by regulations that ensure transparency and fairness in the auction process. Users can manage aspects of this process using legal templates provided by services like US Legal Forms, which can help streamline the documentation required for such auctions.
Here are a couple of examples of abatement:
Example 1: A state government issues a series of bonds with maturities ranging from one to ten years. Underwriters can place bids for specific maturities, allowing them to target the maturities they believe will be most favorable based on market conditions.
Example 2: A city is looking to finance a new infrastructure project and conducts a maturity by maturity bidding process. This allows them to attract a wider range of bidders who may only be interested in certain maturities. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Regulatory Body | Specific Requirements |
|---|---|---|
| California | California Debt and Investment Advisory Commission | Requires detailed disclosure of bids and pricing. |
| New York | New York State Comptroller | Has specific rules for public bond offerings. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Competitive Bidding | A bidding process where multiple bidders submit bids for the entire bond issue. | Maturity by maturity bidding allows bids for specific maturities. |
| Negotiated Sale | A sale of bonds where the issuer negotiates terms with one or more underwriters. | Maturity by maturity bidding is an auction process, while negotiated sales are more direct agreements. |
If you are an underwriter or a government entity involved in a bond auction, consider using legal templates from US Legal Forms to facilitate the bidding process. Ensure you understand the specific regulations governing your state and consult with a legal professional if you have complex questions or need tailored advice.
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It is a bond auction method where underwriters can bid on specific maturities of bonds rather than the entire issue.